Have IH's lawyers admitted they intended to defraud both investors and Rossi all along?

To the title of this thread: No, they have not "admitted" that. Walker has created and posted many completely misleading threads and comments on lenr-forum. This is one.

Walker cites only the full Reply, readable at https://www.lenr-forum.com/for…of-Motion-to-Dismiss-pdf/

This is a final reply on points of law raised in the original Motion, responding to the plaintiff's Memorandum in reply to the Motion to Dismiss. It is not a second motion to dismiss. Walker's claim is so poor, so contrary to the evidence he links, that I begin to suspect he is a troll, attempting to discredit Planet Rossi.

On thing is true, though:

Quote

IMHO I think this second motion to dismiss is going the same place as first. What do you think?

That is right. It's going to the same place, i.e., it is going, now, for the consideration of the Judge, who may or may not schedule a hearing on the Motion to Dismiss. The original Motion to Dismiss stands, and now there is a Memorandum in reply by Annesser, and a Reply to that by the Jones Day team. This is standard process, no decision has been made. It would seem that Walker imagines that the first Motion failed. No, an opposed Motion goes through this process. This is U.S. Federal Court, not Planet Rossi, where people say "blah, blah," and believe that they have carried the day.

Quote from quizzical

Estoppel means that IH's motion to dismiss (based on lack of signatures etc.) will be dismissed because they participated in the 1-year test including approving and paying the ERV.

Indeed it could mean that. Congratulations, you answered the question that Sifferkoll stumbled over.

However, estoppel was not claimed in the Complaint, and estoppel would have to established by reference to specific actions creating it. You have asserted some here, but this is a Motion to Dismiss and is about what is in the Complaint. New alleged fact cannot be asserted by comments in the motion or responses. Approving the ERV is something that existed from long ago, before the test, so that is irrelevant. There is a possible remedy, I have mentioned it, but the plaintiff's attorney has not requested the court allow amending the Complaint to create allegations of estoppel. It was missing from the Complaint; my guess is that the plaintiff's attorney did not notice the missing signatures, nor what is worse, any allegation of a written agreement to the new test date, which was required by the second amendment.

This failure may be fatal to the complaint. This would return the parties to the status quo, which is, by agreement, they could accept a new test date -- or a substitute for the test, which would be much easier than the silly one-year test. Rossi is, however, accustomed to controlling everything, it is his way or the highway. Things shift when you accept $11.5 million from someone who knows their rights.

Quote from IH Fanboy

Abd, just curious, any relationship to the attorney Lomax working for IH and listed on the legal filing? Perhaps a close or distant relative?

I answered this in another thread today. No. Not to my knowledge.

Quote from Shane D.

I get the impression that when Rossi came to IH with his Florida GPT plans, they (IH) knew that their "neglecting" to have everyone on their side sign the new agreement would legally unbound them from the ERV's report. It put them in the drivers seat thereafter, as they could use their own discretion, and not the ERV's, to decide the validity of the test.

I consider this possible. First of all, the neglect was not theirs. The copy of the Agreement filed with the Complaint appears to be Rossi's "counterpart," and Rossi could, at any time, have signed this for Leonardo and could have, if Ampenergo actually consented, arranged for Ampenergo to sign it or another counterpart. There was no way, my guess, for IH to know that there were no other signatures. Because Rossi did not alleged counterpart signatures, it is likely that they did not exist. Rossi screwed up badly by filing that document without getting the signatures. Then he screwed up by not claiming estoppel in the suit. He only had to claim it, not prove it.

However, the 2nd amendment left them in the driver's seat, because they could simply not agree to a test until they were satisfied on the much more important IP transfer issue. What they actually wanted, I assume, was the IP transfer, if there was IP to transfer, or they wanted to find out that there was none -- or that Rossi was deliberately withholding it. IH has now pointed out what I expected, that the 2nd amendment also required a written agreement signed by all parties to the postponed test date.

That is why IH felt safe signing the second amendment. Their freedom was preserved. And one thing that Rossi apparently does not know how to do is negotiate.

Quote

It had to be a purposeful decision on their part. IH types are pretty seasoned in these things, and are almost always "lawyered up", getting advice every step of the way. They just do not miss things like this.

I consider this likely true.

Quote

I would also think it was glaringly obvious to Rossi, or his lawyer (if he had one at that point), that not every block was signed, possibly invalidating the agreement, yet continued on with the test anyways. Would anyone here proceed contracturally with an agreement if every signature block is not signed? I would not, but Rossi did so. I have said for some time, that if he has something, he is sure an incompetent business man.

Or simply insane. I've written some of this here, I cannot imagine having a contract for $100 million, with preposterous provisions as some were, and then writing all over it, and amending it without getting signatures, and then, three years later, filing it without checking all that. I cannot imagine an attorney not noticing the missing signatures, but apparently the attorney did not, because they could have been supplied -- the signatures are not dated, one of the oddities I noted. Who wrote this stuff? There are claims that IH wrote it, but I think they were working from a draft written by Rossi and they only modified it to print it out with the name Industrial Heat on it. At this point, as I understand the decision of IH, they were fully humoring him, agreeing to everything that they could afford, and they could afford $11.5 million, but not an additional $89 million unless he delivered on the IP and they could make devices, which would then allow them to raise the money, trivially. They would set up independent tests, etc., all the stuff that Rossi never did.

Quote

Or perhaps he understood the potential contractual ramifications of the missing signatures, yet, after realizing the GPT provision had already expired due time restraints, realized he was in a weak bargaining position, and would have to continue on with the test on a hope and prayer IH would abide by the original terms. And if not, somehow get a court to make them do so?

In short, so incompetent that we might as well say "insane." Complete failure to understand what IH would need. Or, of course, there remains the possibility that Rossi had no IP to transfer, other than tricks for manipulating "experts." That possibility also requires a level of insanity. (The common refrain when the possibility of fraud is brought up is "But he'd have to be insane." Yup. You noticed!)

Quote

Which is now the case as it is clear from Rossi's response to the initial MTD, that he is trying to legally bind IH back to the ERV report, because they agreed and participated with the 1 year test. Will that suffice to get this case where Rossi wants it...in front of a jury? In IH's response today, they addressed that by saying something to the effect that: "while a contract may be considered *harsh*, or one sided, case law says tough luck Rossi...next time negotiate a more favorable one for yourself".

Pretty fun stuff!

Actually, reading good legal reasoning can be quite fun. Yes, the attempt in the suit is to bind them to the ERV report, that's obvious. The only way I can see for the case to survive at this point is if the judge allows them to amend the complaint to assert estoppel, and what I wonder is why that was not requested. This could be the problem: IH did not, in fact, consent to the test date, as required, and never accepted the test setup. They did participate, in some ways, but under protest. And if he claims estoppel, he must recite specific actions to claim that, he cannot just say the magic word "estoppel" in the legal arguments, it must be in the Complaint itself.

The Motion to Dismiss is aimed at, among other things, excluding inflammatory material from what will be shown to the jury. The jury will see the whole complaint, if it is not dismissed or amended.

Because I had studied the arguments, read some of the case law, and discussed this in the thread here, reading the Reply was like reading myself coming back to me. Annesser, in the Memorandum, essentially -- and unnecessarily -- attacked the defendant attorney who wrote the motion to dismiss, and my sense is that in a case like this, that's a losing strategy, making himself look obsessed. Like his client. The apparent managing partner of the firm is probably close to my age and highly experienced, but I rather doubt that she took much of a hand in this. Annesser seems raw and appears relatively inexperienced. I will not be surprised to see Rossi fire his attorney.

I was a major realization for me that Rossi did not claim in the Complaint, anywhere, that he fulfilled the requirements of the Agreement, section 13.1, to provide training and support to IH "to utilize the E-Cat IP, operate the Plant, and produce the E-Cat Products." He focused entirely on issues of what would lead to payment, in his mind, based on what he'd set up: the Agreement provided that the ERV was to be selected by Rossi, and IH was given no right to object.

If the suit continues, I will not be surprised to see IH claim fraud, and "reasonable suspicion of fraud" might be enough to toss the ERV report. This is a civil case, absolute proof is not required.

Quote from Shane D.

This *estoppel* confuses me. By the definition I read, Rossi indirectly plead it in his suit -without using the actual word, when he pointed out that IH gave a verbal OK for him to proceed with the GPT using the 1MW, as evidenced by their sharing the GPT's costs, and then shopping it to potential investors.

The Agreement explicitly required amendments to be signed by all parties. (section 16.9) That was strict language. It did not merely say "by agreement between the parties," which sometimes is said. So the bar for estoppel was raised. Now, it is indeed possible to claim estoppel, that IH conduct reflected acceptance of amendment. In the Complaint, we have

Quote

64. On or before August 13,2014, ROSSI and LEONARDO located a customer in Miami, Florida, who agreed to allow its facility to be used for the Guaranteed Performance Test and even agreed to pay IH up to One Thousand Dollars ($1,000.00) per day for the energy produced by the E-Cat Unit during the Guaranteed Performance Test.

65. Accordingly, on January 28,2015, the ERV prepared and submitted to the parties a proposed test protocol for the Guaranteed Performance Test. After suggesting minor changes to the test protocol, and clarifying other points, DARDEN on behalf of IH andlor IPH agreed to the test protocol prior to the commencement of the Guaranteed Performance Test.

This is a possible agreement to the protocol. Not alleged to be in writing, and does not mention the start date. This could only be Darden chatting with Penon. We don't know. In particular, this does not establish estoppel, given the explicit requirement. The power payment, was that evidenced by a written agreement? If so, that could establish estoppel. "Agreed to pay." Agreed with whom? What I keep getting a sense of here is incredible sloppiness. There are very good reasons for requiring written agreements, most notably human memory and the vagaries of interpretation. It's bad enough with written agreements!

Annesser did not allege estoppel in the Complaint, though he alleged a few things that could possibly be interpreted that way. I just reread that portion of the Complaint. It's vague. It's all consistent with allowing Rossi to do what he wants without actually agreeing to it, within a background of requesting and possibly insisting on his delivering workable IP. This is my understanding of the law here. If Rossi alleged estoppel, explicitly, specifying what actions created that condition, then it could become a matter of fact, needing trial. But he did not do that in the Complaint and he cannot establish it by arguing it in the Memorandum.

That's my opinion. It is not impossible that the Judge will, however, interpret this all sympathetically. On the other hand, I've been told that judges hate to be appealed, and if the Judge does not dismiss the complaint, given the IH arguments, I think an appeal is likely, by experts. If I'm correct, an appeal by Rossi is less likely, because a superior response would be to amend the complaint and file a better one. The effect of all of this is to delay trial. The judge's alternative would be to allow amendment, to actually solicit it. Considering many issues, I think all that can stand is Count 1. I also think that if Count 1 goes to trial, Rossi loses, because the argument and evidence will turn to overall performance on the Contract and many other issues not yet on the table. Allowing Rossi to sue Cherokee Partners, as a precedent, would create chaos, legally. I very much doubt that even if the judge allows it, it would survive appeal. A count alleging fraudulent inducement is stronger, but Rossi has shown no damage, and the case cited by Annesser was one where actual damage was shown. It's obvious why Rossi wants Cherokee as a party to the suit: it's a fat target. That won't fly.

That thinking was, to use the technical turm, really dumb. Including a $2.2 billion corporation as a defendant guaranteed that the litigation would be tough indeed. IH net assets are much less than a tenth of Cherokee. Maybe 1%. Unless one includes a $100 million license as an asset, which Rossi just attempted to destroy. Not that it was necessarily worth anything.